Illinois entrepreneurs launch 69% more new start-ups than pre-pandemic levels
SPRINGFIELD, Ill. (NEXSTAR) – Illinois is one of the fastest growing states in the nation for new business openings, according to new information from the U.S. Census Bureau, which tracks new start-ups across the country.
According to business formation statistics, Illinois entrepreneurs started 198,827 new businesses in 2021, even more than the 170,400 new businesses created in 2020. Startup success in 2021 represents the greatest number of new businesses ever registered, dating back to when the numbers were first compiled in 2004.
The Census Bureau tracks IRS data to monitor the number of new business owners who file paperwork to register a new business entity each year.
Only six states opened more businesses than Illinois in 2021. The populous states of Florida, California, New York, Texas and Georgia saw more new businesses form last year, but the Illinois’ growth rate has increased a lot.
Seven smaller states, mostly located in the south, saw a faster growth rate of new start-ups. Mississippi, Georgia, South Carolina, Louisiana, Alabama, Wyoming and Delaware are the only states to beat Illinois in this category.
Illinois’ initial startup spike mirrored national trends when a flood of workers signed up to register for federal tax ID in the summer of 2020. Sole proprietors who operated in Illinois without a tax ID needed it to qualify for federal stimulus relief. However, in 2021, Illinois’ sustained growth rate exceeded the national average, surpassed every other Midwestern state, and every other major state in the country.
Illinois opened 69% more new businesses in 2021 than in 2019 before the pandemic.
“The fact that we’re doing even better than in 2019, I think, really shows that there’s a lot of growth here and a lot of people starting a new business,” said Sylvia Garcia, director of the commerce and services department. Illinois economic opportunities.
Kevin Lust, director of an Illinois small business development center in Springfield, said more workers are ready to try their luck after what they’ve endured during the pandemic.
“Most of the people we’ve dealt with over the past couple of years who wanted to start their own business took the opportunity of the pandemic,” Lust said.
“They’re willing to make that bet, both in terms of their personal finances and their current career inertia,” Lust said.
He described a wave of workers who ventured out on their own after bearing the brunt of the pandemic at work.
“Disgust is a very powerful motivator,” he said. “So sometimes people just get sick of it. They worked for someone else. They want to do their own thing, and they just get sick. It’s the trigger. ‘I finished. I’m disgusted with anything,” and they start their own thing.
Many of the most popular sectors for startup growth were retail, warehousing, consulting, IT, construction and transportation.
“Overall, we find Illinois to be a great place for people to start their new business,” Garcia said.